The Bottom Line: Much of $3 million dissolved tobacco fund to go to jail infirmary

How states have been using their windfall from the mammoth 1998 tobacco settlement against the major tobacco companies — some $15.3 billion is being paid to Texas alone over 25 years — seems to be hazy.

According to the Campaign for Tobacco-Free Kids, in fiscal year 2016, the states will collect $25.8 billion from the settlement and tobacco taxes but will spend only 1.8 percent of it — $468 million — on programs to prevent youth from smoking and helping those who already smoke quit.

Wichita County has been frugal in how it has spent its portion of the tobacco settlement money, which it set aside for health-care related issues, said County Judge Woody Gossom. It placed most of its first payment of $2.1 million in January 1999, along with subsequent annual payments, in a protected, interest-bearing reserve fund, minus some money it has moved out of that fund for such things as indigent care costs, city/county health unit projects and to help fund the dental health van. As of 2015, that fund grew to $3 million.

For the last few years, Gossom said the county has received around $60,000 to $70,000 annually.

"We've been very conservative with what we've spent that on," Gossom said. The judge also happens to serve on the Tobacco Settlement Permanent Trust Account Administration Advisory Committee, which is the state's tobacco fund committee.

The Bottom Line, a Times Record News special series, examines local city, county and school district finances to explain how your money is collected and spent. Previous stories, along with infographics, charts and a searchable budget database can be found here.

It was in 1998 that the major tobacco companies — Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Co., Lorillard Tobacco Co. and the United States Tobacco Co. — settled a nationwide lawsuit. Forty-six states, which charged the tobacco industry with covering up the dangers of smoking, wanted to recover money it spent on smokers through the Medicaid program. Those states received $206 billion in the settlement.

This is the 17th year of disbursements from the settlement.

Gossom said the county agreed to save most of the tobacco money and use only the interest to fund health-care projects, which have ranged from purchasing automatic defibrillators for county facilities to helping fund the Children's Health Insurance Plan program and supporting the indigent healthcare program.

Then in 2015, the county dissolved its tobacco fund, transferring that $3 million to the jail improvement fund.

Any future revenue from the tobacco settlement — the $60,000 or $70,000 or so it has been receiving annually in recent years — will now go into the general fund.

The plan for the bulk of that tobacco money will go to building an infirmary in a new county jail, though no concrete details have been released regarding the possible, long-discussed county jail facility.

"We used to take $100,000 out of it (the tobacco fund) and put it into indigent health care. But this year, we're redesignating that fund for a health treatment facility in the new jail. ... We want to make sure we have a great health care facility in the new jail," Gossom said

Gossom said if the jail houses more than 200 people, the state requires the facility to include an infirmary.

Tobacco fund money, about $30,000 to $40,000 annually, also has been disbursed by the county to the Wichita Falls-Wichita County Public Health District, with $100,000 being paid over three years for the dental health van.

The health district receives the Tobacco Prevention and Control Coalition Grant, a federal grant disbursed to the state level and then locally. Two years remain on the five-year fund cycle grant, which started in 2013 and will end in 2018. It is a grant that is applied for annually. The health district will receive a little more than $549,000 in grant money for Sept. 1, 2015, to Aug. 31, 2017.

"That tobacco grant we have requires a match. … We went to the county (for part of the funds)," said Lou Kreidler, director of health for the Wichita Falls Wichita County Public Health District.

Kreidler added that the city of Wichita Falls also supplies in-kind support.

The grant, and tobacco fund money, go to support tobacco cessation classes for everyone, wellness classes for the city and tobacco cessation programs for area businesses, for example.

"We train teens to teach the program (tobacco cessation), and they go out and talk to other kids," Kreidler said.

And in Burkburnett, when the no-smoking ordinance passed, the health district printed no-smoking signs to help offset the cost.

The Bottom Line is a Times Record News-exclusive series where we examine local city, county and school district finances to explain how your money is being collected and spent. This series is published in print Sunday – Thursdays and is available online at timesrecordnews.com/trninvestigates through February 25, 2016.